Largan to dole out large bonuses to employees

Taipei--Taiwan-based Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc, has decided to award its employees a large annual bonus on the back of the company's strong bottom line.

A board meeting approved a proposal to issue NT$4.095 billion (US$132 million) in annual bonuses to 4,600 employees, with each individual expected to receive almost NT$900,000 on average.

The decision makes Largan one of the most generous employers in Taiwan after the company posted NT$169.40 earnings per share (EPS) in 2016, the highest EPS of any listed company in Taiwan.

In February, Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the world's largest contract chip maker, announced it would issue an average of NT$1.07 million in bonuses after posting the company's highest ever annual net profit of NT$ NT$334.25 billion and record high sales of NT$947.94 billion in 2016.

Largan's decision on average employee bonuses was less than the NT$950,000 issued last year as its EPS for 2016 was lower than the NT$180.08 recorded in 2015, but the bonus remains among the highest nationwide at a time when Taiwan is experiencing long-term wage stagnation.

In 2016, Largan's net income fell about 6 percent from a year earlier to NT$22.72 billion on slower global demand.

The company is scheduled to issue employee bonuses in September.

Due to the lower earnings for 2016, Largan said compensation paid to its directors and supervisors will fall from NT$3.27 billion in 2016 to NT$3.07 billion this year.

Largan has benefited from its lead over competitors in high-end camera lens production, in particular dual camera lenses. With more and more international smartphone brands, including Apple and Chinese vendors adopting dual camera lenses in their devices, the market widely expects Largan's profits to improve in 2017.

A U.S-based brokerage has even raised its target price on Largan shares from NT$5,000 to NT$5,700, the highest among foreign brokerages tracking the stock. On Monday, Largan closed up 3.20 percent at NT$4,650.00 to remain the most expensive stock on the local market.

However, the local media cited Nihon Keizai Shimbun as reporting on Tuesday that Largan is likely to be challenged by Japan's Sharp Corp, in which Taiwan's Hon Hai Precision Industry Co. (??) owns a 66 percent stake, as the Japanese firm's subsidiary Kantatsu Co. is planning to expand smartphone camera lens production capacity in China.

The report said that Kantatsu's new production lines, which will be located in Jiangsu province, are scheduled to start operation in 2018, aiming to supply smartphone camera lenses to Apple for new iPhone use.

Sharp has raised its stake in Kantatsu to 44 percent from 18 percent since mid-January.

Source: Focus Taiwan News Channel